What does a travel insurance cover? As we are aware that travel insurance covers loss of baggage and passports, unforeseen medical expenses (read a broken hip, or a sprained ankle), theft, etc. It also covers you for delay or cancellation of journey.

There is no doubt that this is an absolute must if you are traveling overseas. It is worth spending a few thousand rupees; if it means you won't be burdening your family or friends with thousands of dollars of medical bills to pay off. So here are a few things you should know about your travel insurance.

What's your cover? For the most part, when you plan a travel through an agent, you don’t have to bother with the insurance formalities, as the agent will take care of that. However, it is essential that you go over the finer points of all the risks being covered. This means that you need to have a list of all the things that have been covered– loss of baggage, theft, loss of documents, delay, medical expenses, etc. Not just that, you also, in case of medical expenses, need to have specifics of what types of medical expenses are being covered. Clarity on the risk covered will ensure you don’t end up in a situation that causes you a lot of financial damage without being insured for it.

Cashless transfer: Look through your insurance policy and see if they offer cashless transfer of funds, this way if there is a medical emergency, you don't have to pick the tab, the insurance company will directly settle the bill with the hospital. There are some policies, where you are required to pay and you can then submit the claim on the basis if the receipts and documents. Now, this is a very tedious process.
You will eventually be reimbursed, but you need to be prepared for a little less than the actual amount paid by you. For instance, if you happen to settle a medical bill overseas with your credit card, there will commission charges deducted from it by the card company. Then there is also the exchange rate differential. So it's a pretty tricky situation. Not to mention the fact that, if your medical expenses are high, you might not be able to afford it in the first place.

Therefore, it is essential to check with your agent and your insurance provider (if possible) if you are being offered cashless transaction facility.

What to insure? There is a general list of things/situations that you will be covered for. But in case you are embarking on an adventure trip, you absolutely must check with the insurance company if they will cover for damages arising out of that. Quite often insurance companies will cover you for adventure sports, but they will have limits set in the absolute fine print.For instance, if you are covered for scuba-diving, there is a possibility that the insurance company has set a limit on the depth of the dive. If you happen to scuba-dive below that and sustain injuries, you might find yourself without a cover for it. Hence, it is necessary to make a list of all the things you want to be insured for and check with the insurance company of they can provide cover for all.

Shop for a quote: This does sound tedious and more often than not, this is a process travelers are not involved in – it is the agent who picks a travel insurance policy for the traveler. While you may let the agent do the legwork, it will be a good idea to research on your own and see what the various policies available are. This way when your agent gets you a policy, you’ll know the right questions to ask him and by shopping for a quote, you will know whether or not you are being offered a competitive price for the insurance policy.

Domestic travel insurance: Most airlines, when you book tickets online, give you the option of taking travel insurance. The sum is usually pretty nominal – Deccan offers travel insurance for Rs 99. Now usually we click 'No' but it might be worth spending on this insurance especially for low-cost airlines, because, the insurance usually covers you for delay/cancellation of travel as well and that is a common problem with these airlines.
Even otherwise, while domestic travel insurance seems a little unnecessary, if you are taking a semi-adventurous trip, it's a good idea to atleast look at the policies and see what they offer.

Now, when you plan your holiday make sure you have a travel insurance also on your list.